Professor John McHale:

If the Deputy thinks back to the last bubble phase, if a fiscal council had been in place then it should have been shouting "stop" and I hope that if we had been in place then we would have done so. We are very alert to bubbles, particularly to unsustainable growth and unsustainable tax revenues that lead to an unsustainable budgetary position, but at this point we are seeing some regionally isolated price growth and it certainly has been strong price growth, seemingly reflecting shortages of supply. If the Deputy thinks back to the bubble that we went through before, there were three interacting bubbles, a credit bubble, a construction bubble as well as a price bubble, and they were all reinforcing each other. We are not seeing a credit bubble now, if anything, it is the opposite, with credit conditions being incredibly tight.

We are not seeing the credit bubble. If anything, it is the opposite. We have created conditions incredibly tight. We are not seeing a strong bounce back in construction which is part of the problem in the sense of pushing up prices in parts of the Dublin area because there is such a weak supply response. At this point, we would not be concerned that there would be the kind of bubble that did so much damage in the past.